Share-Based Compensation Plans
|9 Months Ended|
Oct. 29, 2016
|Share-Based Compensation Plans|
|Share-Based Compensation Plans||
10. Share-Based Compensation Plans
For a discussion of our share-based compensation plans refer to Note 13 in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016. In June 2016 our shareholders approved the Tailored Brands, Inc. 2016 Long-Term Incentive Plan (the “2016 LTIP”), which replaced our 2004 Long-Term Incentive Plan (the “2004 LTIP”). Awards are no longer available for grant under the 2004 LTIP but outstanding awards under the 2004 LTIP remain in effect in accordance with the terms of the awards and the 2004 LTIP. The number of shares of our common stock authorized for awards under the 2016 LTIP is 6.4 million, subject to adjustments. Under the 2016 LTIP, 18,328 awards have been issued as of October 29, 2016.
We account for share-based awards in accordance with the authoritative guidance regarding share-based payments, which requires the compensation cost resulting from all share-based payment transactions be recognized in the financial statements. The amount of compensation cost is measured based on the grant-date fair value of the instrument issued and is recognized over the vesting period. Share-based compensation expense recognized for the three and nine months ended October 29, 2016 was $5.2 million and $14.0 million, respectively. Share-based compensation expense recognized for the three and nine months ended October 31, 2015 was $4.2 million and $12.6 million, respectively.
Non-Vested Deferred Stock Units, Performance Units and Restricted Stock
The following table summarizes the activity of time-based and performance-based awards for the nine months ended October 29, 2016:
On April 3, 2013, our Board of Directors approved a change in the form of award agreements to be issued for grants of deferred stock units (“DSUs”). As revised, the award agreements provide that dividend equivalents, if any, will be accrued during the vesting period for such DSU awards and paid out only upon vesting of the underlying DSUs. As such, grants of DSU awards on or after April 3, 2013 earn dividends throughout the vesting period which are subject to the same vesting terms as the underlying share award. Grants of DSUs generally vest over a period of three years. DSU awards granted prior to April 3, 2013 are entitled to receive non-forfeitable dividend equivalents, if any, when and if paid to shareholders of record at the payment date. Included in the non-vested time-based awards as of October 29, 2016 are 11,288 DSUs granted prior to April 3, 2013.
The performance units granted in the first nine months of 2016 represent a contingent right to earn shares of common stock, subject to the achievement of a Company-specific performance target for fiscal 2016-2017. Assuming the performance target is achieved, 50% of the award will vest on the two year anniversary of the grant date and the remaining 50% of the award will vest on the three year anniversary of the grant date. Performance units that are unvested at the end of the performance period will lapse and be forfeited. The performance units earn dividends throughout the vesting period that are subject to the same vesting terms as the underlying performance-based awards.
The following table summarizes the activity of restricted stock for the nine months ended October 29, 2016:
Restricted stock awards receive non-forfeitable dividends, if any, when and if paid to shareholders of record at the payment date.
As of October 29, 2016, we have unrecognized compensation expense related to non-vested DSUs, performance units, and shares of restricted stock of approximately $24.6 million, which is expected to be recognized over a weighted-average period of 1.5 years.
The following table summarizes the activity of stock options for the nine months ended October 29, 2016:
The weighted-average grant date fair value of the 593,509 stock options granted during the nine months ended October 29, 2016 was $5.18 per share. The following table summarizes the weighted-average assumptions used to fair value stock options at the date of grant using the Black-Scholes option pricing model for the nine months ended October 29, 2016:
As of October 29, 2016, we have unrecognized compensation expense related to non-vested stock options of approximately $4.5 million, which is expected to be recognized over a weighted-average period of 1.4 years.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef